TMI Blog2008 (2) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act ) whereby, the award dated 25th May, 2004 passed by the sole Arbitrator in Arbitration between the parties has been quashed and set aside. 2. The Appellants case is as under: 3. The Respondent is a transport Contractor/ travelling agent/ service provider, governed by the provisions of Motor Transport Workers Act, 1961. 4. On 17/06/1993, the Respondent entered into a written contract with the Appellant as Handling Contractor for handling its iron and steel materials at their Kalamboli Stockyards, Navi Mumbai. 5. During the pendency of the said contract, Section 65 of the Finance Act, 1994 was substituted by Section 88 of the Finance Act, 1997 whereby 5% service tax was introduced on various services including on clearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the said agent; or iii) in relation to services provided by a goods transport operator; every person who pays or is liable to pay the freight either himself or through his agent for the transportation of goods by road in a goods carriage; iv) after Clause (18) the following clause had been substituted namely: (18A) goods carriage has the meaning assigned to it in Clause (14) of Section 2 of the Motor Vehicles Act 1988 (59 of 1988). (18B) goods transport operator means any commercial concern engaged in the transportation of goods by does not include a courier agency; (iii) in Clause (48), after Sub-clause (m), the following sub-clause had been inserted, namely; (ma) to a customer, by a goods transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/ Appellants recipients of the service of the Respondents as per the agreement in question. The Appellants, pursuant to the Provisions of Service Tax registered and recognized as an Assessee and also filed returns as contemplated, accordingly. The Appellants being assessee, therefore, liable to pay the Service tax being the recipients of the services from the Respondents. Admittedly, there was no specific agreement with regard to the payment of service tax in question by the Respondents to the extent that the Appellants would entitle to deduct the amount so paid or payable under the Service Tax though the Respondents are not assessee and or not liable to pay the service tax under the law. The agreement between the parties, therefore, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absence of specific clause there is no question of deducting such amount as the Respondents contractor is even otherwise and in no way liable to pay such service tax. The Appellants by claiming such deduction, after paying the said tax to the department, recovering the said amount by this method from the Respondents which is impermissible. The department, on application filed by the Applicant, already rejected the specific claim of refund of this amount. 18. With regard to the second part of the Clause 9.3, we have noted that there is no force in the contention that this amount is deductible as the amount apparently made/paid by the Appellants was in no way on account of or on behalf of the contractor. The Contractor was not at all l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itrator ought not to have been interfered by the learned Single Judge. As noted above, we see, there is no force in this contention. The view as expressed by the Arbitrator was wrong. In absence of specific clauses, the interpretation given by the Arbitrator was incorrect and in fact contrary to the scheme of the Service Tax Act itself. One can not overlook the scheme of such service tax which is that it is a tax on service and not on the service provider, All India Federation of Tax Practitioners and Ors. v. Union of India and Ors. 2007 ECR 451 (SC) 23. The Hon ble Supreme Court in Chiranjilal Shrilal Goenka (Dead) By Lrs. v. Jasjit Singh and Ors. (2001) 1 S.C.C.486 reiterated that the Court can interfere with the above, where Arbitrato ..... X X X X Extracts X X X X X X X X Extracts X X X X
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